Pages

Friday, January 10, 2014

Doing a good job in the precious present, regardless of the job we are doing, is the best investment opportunity we have, whether it's in the classroom, on the athletic field or at work.

And to do a good job in the here and now, we have to show up, work hard, and consistently display the habit of getting better. Oh, and one more thing --- we are obliged to make a consistently determined effort to help our teammates perform better while doing their jobs. That's called leadership.

Former Coach Dean Smith of North Carolina basketball fame said that success in any team oriented endeavor is all about working hard, smart and together. Bobby Knight of Indiana and chair throwing fame said that our opponent is our potential. The old coaches nailed it for me.

Thus, achieving success is as simple as following the 1-2-3 formula of (1) getting in position, (2) spending lots of time on task and (3) developing the habit of rapid and continuous improvement.

And that's the 'secret,' whether we're in the classroom, on the 'court,' or on the job.
................................................................................

But now let's focus on 'self coaching' and the importance of applying this 1-2-3 formula to personal financial management issues. Today is important since it's first one of the rest of our lives.

{Of course, the nation's jobs and unemployment report is due out at 8:30 am this morning as well. 200,000 new jobs and a 7% unemployment rate are the predicted consensus outcomes, but we'll see about that.}

In any event, time lost is gone forever and tomorrow is never a mere carbon copy of just being 24 hours later than today.

Time management and financial management go together like peas and carrots, as philosopher Forrest Gump once said.
....................................................................FINANCIAL KNOWLEDGE AND EDUCATION

Most people need to know more about investing and personal finance, including debts and 401(k) plans. That's a fact.

Yet most people are lacking the knowledge they wish they had and are often fearful (and properly so) of trusting others to help them acquire that knowledge. That's a fact, too.

So let's take a crack at all these things today, and also focus on the best possible investment each of us can and should make. It's called doing a good job, no matter what job we're doing, and it starts with education and doesn't end until well after we've retired.

"A recent survey financed by Bank of America found that 78 percent of adults in the United States believe it is difficult to learn about personal finance, and 43 percent worry they have missed good financial opportunities as a result. The survey also found that the problem is not lack of information: Forty-two percent of adults say they are overwhelmed by the amount of information available. A related problem is uncertainty about whom to turn to for advice; 28 percent say they don’t know where or whom to turn to. In general, it’s a good idea to turn to a source that doesn’t stand to gain from its own advice." {MY NOTE: Words to live by.}............................................................................Now let's go deeper into how people feel about personal financial literacy and discover what A Bridge to Somewhere: ... Democratizing Digital Learning has to say:

"Bank of America ... announced findings from its "Bridging the Knowledge Gap" Survey ... which explored the gap between learning and knowledge in financial education. Key findings included:

-- Americans overwhelmingly expressed support for personal finance to be included in the curriculum in high schools - with virtually all U.S. adults (99 percent) saying they believe it is important for high schools to teach students about personal finance.

-- Unfortunately, roadblocks prevent a good understanding of personal finance: nearly four in five U.S. adults (78 percent) believe it is difficult to learn about personal finance, and 43 percent believe they have missed good financial opportunities due to a lack of financial knowledge. . . .

-- More than two in five U.S. adults (42 percent) are overwhelmed by the amount of information available about financial issues, and more than one in four (28 percent) believe it is difficult to learn about personal finance because they don't know where or who to turn to.....

-- More than nine in 10 (92 percent) believe - including about three in four who strongly agree (74 percent) that - it is essential for all adults to be financially literate.

-- Approximately nine in 10 U.S. adults (89 percent) agree that, if individual consumers were better able to manage their personal finances, it would have a positive impact on the broader U.S. economy - and nearly two in three (64 percent) strongly agree."...................................................................................................DOING THE JOB

The best, little-known investment people should be turning to more often stares at them in the mirror each day.

We invest so much time, energy and effort trying to eke out outperformance in our portfolios. We subscribe to publications, read research, and watch celebrities bite the heads off of foam bulls on TV. But how much time, money and energy do most people spend thinking about how to grow their careers and their income?

Your most important financial asset is your job, and even a small increase in your earning ability can make a huge difference.

"Let’s imagine you are 30 years old and making $70,000 a year. If you get a 3% salary increase each year, by the time you’re 65, you’ll have made $4.2 million. Your ending salary will be $191,233 a year (which sounds like a lot, but inflation probably cuts that in half in real dollar terms).Alternatively, what if you invest in some classes? What if you get your CFA, M.B.A. or some other degree? What if you can up your salary increases to 5% a year?Amazing things happen. Over that same time period, you’ll earn $6.3 million: $2 million more than in the 3% model. Your ending salary will be $367,734 (which sounds like a lot, but remember, inflation will cut that in half).Where else can you pick up $2 million these days?"Summing UpWith this blog, I'm trying to do my admittedly very small part to help people become more knowledgeable, familiar and comfortable with the area of personal finance and investing.And I'm doing it for one simple reason.I believe strongly that a lifetime of learning and then sharing what we've learned is both fun and personally fulfilling.I also strongly believe that taking academics seriously early in life (I didn't get 'seriously' started as early as I should have, but better late than never) is important in order to be able to get a good job when reaching adulthood. Hard work and knowledge may indeed be their own rewards, but even if so, it's nice to have financial freedom, too.So I'll finish this little plea or 'sermon' about the need for greater personal financial knowledge with a favorite 'live and learn' quote from Mahatma Gandhi: "Live as if you were to die tomorrow. Learn as if you were to live forever."What he said makes sense to me. I hope the same is true for you.Thanks. Bob.